Sense of Urgency: A Critical Factor for the Future of Brazilian Terrestrial Fields
Brazilian onshore fields, and consequently, their production, have always been underexploited. Comparative data with other Latin American countries, collected by the ANP, show that Brazil, despite having a much larger geographic area, has smaller reserves and terrestrial production than almost all producing countries in South America (Colombia, Argentina, Bolivia, Ecuador and Peru). However, we are experiencing a positive moment in the oil sector in general, as a result of the alignment of views from the Ministry of Mines and Energy, the ANP and, to a certain extent, Petrobras, which, in particular in the Onshore sector, decided to include in its divestment program, the land concessions. From this alignment, under the leadership of the MME, a lot was done in a very short time. We can say that in the last 10 months much more has been done than in the last 10 years.
pertaining to onshore, our focus, we highlight three of the main initiatives:
1) The launch of REATE - Program for the Revitalization of Exploration and Production Activities of Oil and Natural Gas in Land Areas, on the initiative of the MME, through its Secretariat of Oil and Natural Gas, which, after a diagnosis, conceived this structuring program to unlock the sector through legal and regulatory improvements, identification of funding sources, etc., and which, according to MME's expectations, will allow production to jump from the current 130,000 barrels per day to 500,000 by 2030.
2) The creation of the Land Areas Coordination within the scope of the ANP, a former ABPIP request, made possible from the first moment of this current administration, which has greatly facilitated the sector's dialogue with the regulatory body and already has a long regulatory agenda to be worked on. and who will be responsible for the internal articulation with the various ANP superintendencies of the rebuttal of REATE's demands in the regulatory scope.
3) And finally, we highlight the launch of the TOPÁZIO project, the first pilot project of others that will make the total sale of the rest of the onshore fields under Petrobras concession, composed of a set of fields that at the time of its launch corresponded to 36 thousand barrels per day , almost 12 times the total production of all independent national onshore producers. The initiative to sell these assets, in addition to allowing Petrobras to raise funds, will bring critical mass to the production of independent companies, with the possible entry of new operators, and obviously new investments, which will recover the deficit of investments accumulated in recent years that generated losses of jobs, generation of taxes and income in so deprived regions of the country. Nevertheless, the Topázio Project was suspended injunction by court order, in addition to having received recommendations for adjustments issued by the TCU, which, in the opinion of these authorities, the form of bidding for the fields designed by Petrobras based their respective decisions. It remains that the sale process was canceled by Petrobras to be improved, observing the issues that deserved the aforementioned interventions.
We are at the point of “What now, José?”, obviously, without Topázio, there is no REATE and without REATE there is no increase in production, there is no investment, there is no generation of employment and income. Conservative data indicate that we are facing an opportunity to generate jobs in the order of 200 thousand jobs (direct and indirect), almost R$4 billion in royalties, about R$6 billion in investments. Much, much more than the loss of a contribution that Petrobras would obtain in its cashiers, especially in a country that has 14 million unemployed and a sector with a long production chain being dismantled, a growing decline in production that generates more and more losses every day. . The moment requires ACTION.
Going through the lessons that should be learned from this episode with pragmatism, we see that the first step towards resuming the beginning of this virtuous circle is the shelving of the process that is still being processed in the 3rdThe Federal Court of Sergipe that gave rise to the injunction, still in force, but with the cancellation of the Topázio project, the action lost its object, a fact that is being analyzed by the Judge of this court.
Once this stage is over, in our view, the most appropriate way to bid for these fields is through the ANP, with its established model that has always ensured that all auctions carried out proceed normally, successfully and quickly. In fact, as Mexico did recently, when PEMEX successfully sold land areas through the ANH, the Mexican ANP. We hope that in the alignment between Petrobras, ANP and MME, common sense and a sense of urgency will prevail to start a new cycle of development and generation of wealth that the country so desperately needs.
The Brazilian Association of Independent Oil and Natural Gas Producers (ABPIP) celebrated its 10th anniversary last March, an entity of which I have been Executive Secretary since 2011, continuing a struggle begun since its foundation. In this journey, ABPIP led and brought together efforts from several other institutions that, over the years, joined the cause. This trajectory has allowed ABPIP to be recognized as the entity that best represents the business vision of operators in the Brazilian Onshore E&P market.
Anabal Santos Jr. - Eng. Mechanic (UFBA) with Specialization in Petroleum Engineering (Petrobras), MBA in Finance (FGV), Master in Energy Regulation (Unifacs). He is Executive Secretary of ABPIP, member of the Oil, Natural Gas and Naval Council of FIEB and partner of Soluções Energia Consultoria.